It’s no secret that Apple and Samsung’s relationship has deteriorated, so much so that there were rumors that Apple was considering investing a huge sum of money into Sharp to replace Samsung in the manufacturing of iOS display panels. Now the rumors are saying that Apple may also be dropping Samsung from their list of chip-suppliers for their iOS devices. Today, Samsung is manufacturing the A5 chip for Apple.
According to Digitimes, Apple officials have reportedly visited alternative suppliers for their A6 chip, which is expected to make its way to the iPad 3 (rumored 2012 release). It seems that they paid a visit to Siliconware Precision Industries (SPIL) and are reportedly pleased with what they saw and are willing to discuss the possibility of working together to produce Apple’s A6 chip.
“Apple recently conducted a visit to SPIL’s assembly line, and both parties discussed opportunities for cooperation, the sources revealed. SPIL stands a chance of becoming the first packaging and testing service provider designated by Apple, cutting into the supply chain of the vendor’s processor line, the sources said.”
Given that Samsung plays a huge role in manufacturing the critical components of Apple’s products, if the rumors are true about them possibly losing the contract (or playing a smaller role) for the display panels and A6 processors, it would be a pretty huge financial blow to the company. How big remains an active question.
The reality is that other foundries like TSMC and UMC can take on the job. They both probably have, or could add the capacity to do this. If Apple was to change, it would certainly be an inconvenience to Samsung, but certainly not a “death blow”. Finally, while there might be drama around this, it is certainly not unusual for companies to use different foundries, to hedge their bets in case one runs into trouble, but also to perform “vendor-balancing” to keep the prices low.